TVG takes over PowerTel - now for the others

Hong Kong investment firm Telecom Venture Group (TVG) is expected to turn its attention to other Australian telecommunications assets after winning the bitter struggle for control of PowerTel.

US telecom WilTel finally left the regional network owner's share register yesterday with the sale of its 47 per cent stake to TVG for $20 million, making TVG's 3.85c per share takeover bid unconditional.

TVG is not expected to acquire all outstanding shares.

PowerTel's board had recommended minority shareholders either hold their shares and participate in the rights issue, or sell at current prices.

The company's other major shareholder, Downtown Utilities (DTU), took the board's advice and sold 72.4 million of its shares for 5.4c each last week.

The remaining 220 million were subject to pre-emptive rights and could not be sold before now, but DTU's Lisa Maffina said no decision had been made on that stake.

"We will be looking at a range of options," Ms Maffina said.

If TVG acquires the stake it will own 69 per cent of PowerTel.

Shareholders will vote on the $50 million rights issue next month, which will be funded by the issue of preference shares.

No official comment was forthcoming from Geoff Cousins, Trevor Kennedy and Sam Gazal, the Australian businessmen behind the original bidder, the Roslyndale syndicate.

But Mr Cousins didn't hide his displeasure when DTU, which is controlled by the NSW Government, voted down Roslyndale's bid for PowerTel last month.

"It's quite unprecedented and entirely inappropriate for a government authority to manage the outcome in this way," he said.

The Roslyndale syndicate isn't expected to bid for other telecom assets on offer such as two network providers now in receivership, NextGen Networks and IP1.

But TVG's name has been linked to NextGen and Uecomm. Uecomm's new parent, Alinta, is expected to sell its 67 per cent stake soon.